Banking Crises and Bank Rescues: The Role of Reputation

Jenny Corbett and Janet Mitchell

No 2453, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper focuses on bank rescue packages and on the behaviour of troubled banks in light of rescue offers. A puzzling feature of experience with banking crises is that in many cases policy authorities make offers of bank rescue, and banks are reluctant to accept these offers. We study situations in which regulators have decided to offer bank rescue plans, and we show that a combination of factors, including bankers' reputational concerns, can explain banks' potential reluctance to accept offers of recapitalization.

Keywords: Banking crises; Banking regulation; Financial reforms (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2000-05
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Citations: View citations in EconPapers (11)

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Working Paper: Banking Crises and Bank Rescues: the Role of Reputation (2000)
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